A strategic balance was vital to peace in the region, as well as a solution to the two countries' five-decade-old dispute over the Himalayan territory of Kashmir, he told the Royal Institute for International Relations here.

India's conventional forces vastly outnumbered Pakistan's, especially in air and naval power, Aziz said. "The gap is growing by the day," he said, with India "rapidly expanding, upgrading and modernising" its armed forces.

"Pakistan does not, and I repeat does not, wish to enter into an arms race with any country, including India, whether this is nuclear or conventional," the prime minister said.

"We believe such a race is neither economically sustainable nor morally tenable, and would be destructive to the entire region. The two neighbours need to invest in the tools of development, not in tools of destruction.

"We will continue to pursue a policy of restraint and responsibility in nuclear matters. We hope that India will agree to the concept of strategic restraint in South Asia," the Pakistani leader said.

Despite his warnings, Aziz reaffirmed comments made during three days of talks with European Union officials in Brussels that Pakistan is serious about peace with India.

The peace process has been shaken recently by Pakistani accusations that India is violating a 14-month-old ceasefire in Kashmir, days after New Delhi alleged that Islamabad had launched mortar bombs into its territory.

"But for durable peace and security in South Asia, there has to be a balance of conventional and strategic (nuclear) capabilities," Aziz told the Brussels think-tank.

He added: "At the core of problems between Pakistan and India lies the Kashmir dispute.

"Any number of confidence-building measures would turn out to be futile as long as there is no movement on this front," he said.

"In fact, resolution of the issue of Kashmir would itself be the best confidence-building measure of all."

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